Wallstreet under pressure with trade wars, disappointing NFP and Powell speech

• Trumps imposes new tariffs on China which in turn is ready to respond. 
• The disappointing Non -Farm Payroll and Powell’s speech compounded the negative sentiment.

 
US stocks were hit on the last day of the week as Trump proposed to impose $100 billion worth of tariffs on China imports. The Asian nation said that they will respond with countermeasures if needed. 

“The Chinese side will follow suit to the end, not hesitate to pay any price, resolutely counterattack and take new comprehensive measures in response. China “doesn’t want” a trade war, but is not afraid to fight one.” said China. 

“Today’s market reaction is a reflection of investor fears that the trade rhetoric will get a lot tougher before any negotiations between US and China get going,” according to Ryan Larson, from RBC Global Asset Management.

Compounding the negative sentiment was the Non-Farm Payroll which came lower-than-expected with only 103K new jobs in March against 193K expected by analysts. 

Meanwhile, earlier in a speech, Federal Reserve Chairman Jerome Powell reiterated a patient approach to rising interest rates in order to best promote growth, which the market interpreted as a lack of inflation. 

“Since monetary policy affects the economy with a lag, waiting until inflation and employment hit our goals before reducing policy support could have led to a rise in inflation to unwelcome levels. In such circumstances, monetary policy might need to tighten abruptly, which could disrupt the economy or even trigger a recession”, said Chairman Powell. 

S&P 500 Index 4-hour chart

The short-term momentum is bearish. Support is seen at $,2580 and $2,551 swing lows while resistance is seen at $2,640 psychological level and $2,672 swing high. 

Dow Jones 4-hour chart

The short-term momentum is rather bearish. Support is seen at $23,800 and $23,332 cyclical low while resistance is seen at $24,200 supply level and $24,618 swing high. 

Nasdaq 4-hour chart

The short-term momentum is bearish with the MACD turning into negative territories. Support is seen at $6,400 swing low and $6,296 cyclical low while resistance is seen at $6,500 supply level and $6,642 swing high. The short-term momentum is quite bearish with the MACD turning into negative territories. As per the technical configuration, a retest of the cyclical low is not impossible on the three indices.